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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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Washington 9, California 7, Us 7, U.s. 6, Dan 5, S&p 4, Lowe 4, Tobias 4, Texas 4, Virginia 4, Wti 3, Italy 3, France 3, Bob Pisani 2, Schwab 2, Kayla 2, Apple 2, Fema 2, United States 2, Sandy 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    November 19, 2012
    3:00 - 4:00pm EST  

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happy rally monday. welcome to "closing bell." i'm bill griffeth. >> i'm michele caruso. maria bartiromo will be back tomorrow. more hopes washington can get together on the fiscal cliff. >> posting our biggest gains, sitting near the highs of the session right now with the dow up almost 180 points. 104% gain at 12,767. nasdaq doing very well today. apple leading the charge higher, at 2906 on the composite. a lot of traders are watching the s&p today as it gets back above the 200-day moving average at 1383. markets rallying out of the gate. haven't looked back since the open. is it really because there are signs that lawmakers are at least trying to rise above and make a deal on the fiscal cliff? >> maybe. in today's "closing bell
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exchange ", mark, gene and our own rick santelli. art, let me start with you. is this a rise above rally? does it look like we might get a deal? >> we've been rising above the levels we've been at. no question about that. traders felt reassured coming in this morning. washington is a ghost town. the president's out of country -- >> those are good things. >> congress is not coming back until next week. no one will go before the cameras and jeopardize the cliff. the only file you have to run is the kum-bi-ya moment after the meeting. they said nothing across the pond will hurt us, let's buy here. >> no sense of urgency right now. does the market feed off that? is that what's going on here? >> i continue to look at the treasury market. you can look at a chart overlaid with the stock market. we were following themmer earlier, especially with the
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opening you describe, then it started to fall off. treasury market seems unimpress unimpressed. i'm in agreement with art, which is a good thing because art is mostly right, that is, nobody's driving the car from a political standpoint. that's the only time i can say a car without a driver is a safer car to be in. the market is reflecting that. if you want to look at something to give you a good clue, watch the euro relationship with our stock market and the global stock markets. that relationship is directly correlated and something to pay attention to. >> as the euro goes, so does our markets. stand by, we have break news on a story we've been watching on hostess. kayla has that. >> the latest is that the u.s. bankruptcy judge said that the parties have agreed to a medation in the prevention of shutting down hostess. that will likely be monitored by the same judge tomorrow morning at 11 a.m. this is an attempt to avoid a
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shutdown, even though in today's hearing the hostess brand lawyer said it would be, quote, very hard to recover from this damage even if there were to be an agreement in the near term. still unclear what this actually means for hostess's ability to operate is a going certain but still a positive move and we'll stay tuned to what actually happens tomorrow. >> he's put off the table for now chapter 7 or chapter 11, is that my understanding? he's going to get them to do a deal even though bakers have rejected? >> that's right. an alternative to liquidation for today. he's giving them till tomorrow to say, if quu agree on some terms in the private, the brain trust will be in a room trying to hammer out a deal. if not, more options will be on the table. at least for the next 24 hours it looks like liquidation is off the table. but just for this very short term. also the question whether there is a buyer waiting in the wings. certain buyers would come out of
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the wings, depending on what happens. but still a lot to be done here. >> wow. >> even the judge wants to save twinkies. >> everybody's a fan there. >> everybody wants to save 19,000 jobs. no one can argue with that, regardless of how you like the twinkies. >> get the toothpicks out for the eyes so nobody blinks. thank you. gene, you feel these markets are oversold but the fear indicators is not cooperating right now, is it? >> no, it isn't, bill. i certainly agree with what both art and rick mentioned. i think they're both good comments. from the technical standpoint, though, the market was quite oversold. by last week's close. we're seeing a biflt a reflex rally. i think that it can happen. much beyond that i don't think we can drive it with just hope. enough to be concrete measures from washington. i think we're going to be in a range here right now, roughly in the dow between 12,500 and
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13,000, more or less the stock-picking market as we go forward. >> mark, what do you think of this rally? do you believe it? a rise above rally? do you think there's a deal coming? >> i unfortunately have to agree with everybody else, as much as i would like to strive phone contrarian view, but it is a bit of a hope tree at the moment. we don't have any evidence that policy makers have agreed on anything at this juncture other than so far the rhetoric has been encouraging. in the absence thereof, i still think we have to be somewhat cautious relative to knowing that the track record of acrimony could still exist and all you need is in-fighting between elected officials. >> arthur, are there certain parameters -- i'm going to turn and look at you. certain parameters the market is looking for in a deal on the fiscal cliff or are you in the camp that also suggests that any
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deal, no matter what it is, is good for the market? just so we get clarification. >> i would think any deal agreed to by both sides, the market would take real hope in. but we have no real detail. if you go broadcaack and look a kum-bi-ya moment out of the white house, they all have a slightly different date. nancy pelosi said we hope to get this wrapped up by christmas. one of the others said early december is when it should be done. shortly after thanksgiving somebody else said. so, i think we're lacking details, lacking commitments. we'll have to keep with the skeptics going. >> gene, what do you think? do you care about the structure of the deal? some would say have you to solve entitlements or the bond market is going to punish the country and it has to be dealt with? or do you think the stock market cares about getting something, anything done, before the end. year? >> on an immediate basis, no doubt. it cares about getting something
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done, something on the table. for the longevity of the upside, yes, i think it is concerned about what measures are really put in place, what the bipartisan cooperation really looks like in the end. >> rick, do you agree? >> i think in the near term any type of conclusion to this is going to be a positive for equities. don't confuse that for whatever deal is struck, how it affects long-term economic growth. ultimately that's what the stock market is bond market will pay attention to. i call it the greece trap. >> we keep talking about what the stock market would do on a fiscal cliff deal. what would the ten-year yield do? >> i think on a fiscal cliff deal you'll see maybe 15, 20 basis point move. >> wow. >> i don't think they'll have a huge move. >> i would think so. >> well, that feels like a huge move in the present context. >> present context, you're correct. >> mark, quickly, where are you making money right now? >> a couple areas.
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if we do see a continued advance in equity prices on the prospects of a fiscal cliff aversion, energy and technology. technology is down double digits. energy fell off as oil prices fell down to the mid-80s, somewhat toward an uptick. >> gentlemen, thank you all. arthur, good to see you on set with us. >> thank you very much. >> thank you for joining us today. we call this fiscal cliff investing. bertha coombs joins us with the potential winners and losers in how investors can play all this with a fiscal cliff portfolio. >> and they've been doing it already. if the president and congress fail to reach a deal on the fiscal cliff the expectation is that stocks will be the big loser. defense stocks in particular with a prospect of massive budget cuts starting january 1st. now, they've been hard hit since the election, turning around a bit today. cnbc looked at a portfolio of etfs that correlate with the moves in the market on the fear
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of hitting fiscal cliffs in particular sectors, including etfs that short stocks, negative bets on the market, like the ultrashort s&p eft. down all year, its been a gainer since the election. consumer shorts, technologies, financials have been gainers since the election, until today. with more conciliatory talk coming from the white house and congressional leaders over the weekend, investors are showing more optimism maybe we will avoid the cliff. the snydr s&p and aero s&p are gaining. also higher the 20-year treasury short etf. whether or not we go off the cliff, investors are positioning themselves to make more money, and for more check out
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riseabove.cnbc.com. >> i'm just noticing one of our producers at the new york stock exchange pointing out today is apple's best trading day to the upside, up 6.6% right now. doing very well. is that a rise above move? >> seems like it. >> once you get that fear out, once you get that feeling that maybe you need to take your capital gains now on big winners, like apple, then maybe you can hold onto the stock, hold onto it into next year rather than sell it right now. >> thank you. >> i guess the dilemma you face, where do you put it? so you sell this and then you still have to put it somewhere. >> t-bills aren't paying the bills, that's for sure. we'll take a break. hope you can stick around. a lot coming up. the dow in rally mode, up 171 points. did 2012 kill active investing? eye-opening numbers on passive versus active investing. investment by corporate america is falling off a cliff because of so much uncertainty as we all know. but would all of that money
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really come off the sidelines? if a deal on the budget and taxes were made? we'll look at that coming up, both sides. >> stocks rallying just on the hopes a fiscal cliff might actually get fixed on time. what actually are investors optimistic about? all that and more coming up. ♪ [ female announcer ] today, it's not just about who lives in the white house, it's about who lives in the yellow house, the green, and the apartment house, too. today we not only honor the oval office, but we honor the cubicle, and the home office as well. because today it's about all of us. and no matter who you are, you're the commander-in-chief of your own life. ♪
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snooi. welcome back. about 45 minutes left in the trading session. we want to get you caught up on this market. best rally for u.s. stocks in a couple of months. the dow right now is still near the highs of the session with a gain of about 180 points. we're calling it the rise above rally. the rally began just from the get go this morning on signs and hopes of progress between democrats and republicans over the looming fiscal cliff debt crisis. right now the dow on pace for
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its best gain in more than two months. check out the cbo volatility index, moving lower by 6% right now. again, what we were talking about before, michelle, with gene, even as the market was going lower, there was no fear in the market and it continues to move lower. fear indicator at a multimonth low right now. active investing, is it dying? having a mutual fund or hedge fund manager who actively picks stocks instead of just investing in a fund, like the s&p, like a spdr. >> there's ron who says the rumors of the demise of active manager are greatly exaggerated. we welcome you both and we hope you play nicely. >> i suspect we will. >> what is contributing to the death of the active manager? >> it's nothing new and nothing new that passive is
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outperforming. the big thing has been over the past two years, it's been an absolute slaughter. i think it comes down to three factors. the first two are nothing really new 37. number one is risk aversion, a lot of risk-off trade. investors are scared. getting out of stocks, going into bonds. i think the second thing is this archaic fund fee structure that the funds have, that they've got to revisit. the third thing is what i think has been different and what has made the difference has been the headline risk. one of the fund guys i talked to said, you know what, we're taught to evaluate companies fundamentally by all the basic metrics we've historically used. now it's like have you to be a macro guy, a political scientist. >> i was going to add to that, to me it seems like why would i hire anybody when everything is correlated, everything except treasuries, ron, so why would i bother to have somebody actively manage? >> because we're having this
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very conversation, id say having just declared buy and hold debt march of 2009 you'd be up 110%. maybe it's premature to indicate active management is dead. it's a very broad theme and comes down to, if you give money to someone else to manage is engaging in serious due diligence and looking at manager selection in a serious manner. the fidelity contra fund ten years ago you would have more than doubled your money if that period. if you had gone with ray or david einhorn, a lot of individuals who happen to have the skills to perform very well. it's the investor's job to find those people. not necessarily make blanket statements about which style works and which style doesn't. >> you know, ron, my issue is you're not talking 30% or 40% underperforming. you're talking 80 -- 75% or 80% outperforming. i think that's asking investors to basically find the needle in
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the haystack. to me it's the fed. the fed is manipulating markets, influencing markets. it's risk on, risk off -- >> but i don't think it's going to stay that way. >> the average investors doesn't have access to david einhorn, right? >> has access to contra fund or slidly performing mutual funds. go to morning star and find active managers who outperform on a consistent basis. >> that's fair enough. past performance is no guarantee of future results. >> that's true in passive investing as well. people were saying to buy the chinese etf for the last five years. if you did that passively, you were down passively 50% while the s&p was up 110. it's not as easy as saying you have to go passive because you can make the wrong asset allocation choice at the same time. there's more to it than which type of investing works. you as a passive -- >> i'm drilling down, to jeff's point, if the average investor
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were watching right now, the only money this person has in the stock market is the 401(k) offered although work, they probably got four or five funds, the only choices they have. they look and they go, oh, give me the spdrs, the etfs. >> i had a conversation with a guy at the schwab conference. he said it's gone through three stages. he cites specifically a low val tillty fund, bank loan funds and getting createdtive so you can be an active investor within the passive space. >> sounds like more ways to get in trouble. >> that also defies everything we discussed. being an active investor in the passive space is being an active investor. >> it does sound weird but there's a difference between looking for a fund and going out and basically trying to time the market. >> thank you, guys. >> but the sector is incumbent
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on the investor -- >> you're right. >> thank you so much. >> thanks, guys. about 40 minutes before the closing bell. dow jones near the highs of the session, up 177 points. >> more good news for the housing market today. we'll have that, plus why it could also be good news for home depot and lowe's. >> violence escalating between israel and gaza. now it's impacting energy prices. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball.
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superstorm sandy didn't derail the housing market after all. we have more good news out of that bee leagbeleaguered market >> they say sandy did not impact october numbers so much. it was only three days. we'll see the effects of sandy in november, however. overall didn't change the good recovery we're seeing in october. take a look. existing home sales rose 2.1% month to month. that's slightly above expectations. that's because september's numbers were revised down slightly. the bigger story is supply. inventories are down a whopping 22% from a year ago to 2.41 million units. that's lower than any point since late 2005. that is the height of the housing boom. that is due to fewer distressed properties for sale and all that competition is pushing home prices higher. realtors report an 11% jump year over year in the median price. while some is the shift in what's selling to higher priced homes, because that's of course
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how medians work, fun fact is home sales higher than $500,000 are up 40%. they still make up less than 10% of the market. with all cash investors ruling this market coupled with tight supply, home builders are seeing much more business now. that pushed builder sentiment up to the highest level we've seen in six years. for more, it's on the blog, r l realtycheck.cnbc.com. shares of lowe's surging on earnings beat. if you're looking for a nonhome builder housing play, what's a better buy, do you think it's lowe's or home depot? we'll do that in "talking numbers," tanner and steve cortez. thank you for joining us. from a technical perspective, what do you think, lowe's or home depot? >> i prefer lowe's. if we look at a 20-year chart
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starting with home depot you can see the set-up is quite reminiscent of 1995 to 1999. the last four years resembles that period. 1995 to 1998 you saw home depot have a gradual healthy upbeat. from '99 we saw a steep assent, that was an unhealthy move. similarly from 2008 to 2011 we saw a healthy gradual uptrend. the stock has more than doubled. if we look at lowe's, on the other hand, you can see that actually it's a similar type of set-up but a much more healthy trend. from '95 to '99 a gradual three-year rally and then a steeper assent but still not too excessive this time around similarly. >> steve, you like home depot. i got to admit, that charge made it look like a parabolic curve there. >> i do prefer home depot. i would say i disagree with you
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for a couple of reasons. comparing the present period to the late '90s is a false analogy. the entire u.s. stock market fell apart in the spring of 2000. are we setting up for that kind of fall? that's possible but not a home depot issue. the larger issue, if you look at any housing stock, a home builder, these two, any of these relating to housing will be incredibly overbought technically. >> to your first point, the technicals inform fundamentals. part of the reason the '99 valuation was parabolic is because valuations got out of hand. like apple, fundamentals might look good but should it trade at 1 times, 13 times -- home depot is the same way. technicals give you more information than fundamentals. >> the entire sector is entirely overbought, anything relating to housing. i think it is per verse logic to say we don't want to bet on home
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depot because it's rallied harder than lowe's. it it's outperformed this year and over the last ten years. to say it's performed better we don't want to buy it. it would be like a gam ber saying we don't want to bet on the texans because they're winning. >> no, you don't want to bet on the crazy, crazy parabolic winner. >> good discussion. thank you for joining us. dow is up about 177 points as we have about 33 minutes until the closing bell. economic uncertainty blamed for corporate america, drastically cutting back on spending plans, despite sitting on a trillion dollar cash pile. our next guest says that's just an excuse. companies won't start spend organize hiring no matter what. hostess agreeing to mediation with its bakers union. we have the latest next. that means so far twinkies live to see another day. we'll see. plus, what hostess workers rather see the company fall rather than take the deal with lower pay and lower benefits?
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those of you who have been hoarding twinkies, you might
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want to think about serving them for thanksgiving because theyma. hostess and its bakers union just in the last hour or so have agreed to mediation talks. kayla with an update on the news. >> for trading twinkie futures might want to wait a day. tomorrow at 1 p.m. the judge of the u.s. bankruptcy court will preside over a mediation between hostess lawyers and bakers union which had previously turned down a deal. tomorrow's mediation is private. that's important because like the public hearing today, of course, everyone wants to satisfy those who are watching and the vested interest at hand. this way they'll hopefully be able to put some concessions on the table without worry being that public perception. if that mediation does not resu result, the hearing that was going on today for the liquidation, that will resume wednesday at 11 a.m. if, in fact, they cannot reach an
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agreement tomorrow. for the meantime, a lot of people have been in the parlor game of speculating about whether a buyer will come to the fore. many companies have voiced they wouldn't step in before seeing the outcome of whether the company would be liquidating. in that case pick off the assets. we have heard sun capital potentially interested in a deal, that would be involving the unions. so that might be something we see throughout the next day. tomorrow they will attempt to mediate. if necessity can't get an agreement, they will liquidate. >> the twinkie drama continues. thank you. we all know how much falling off the fiscal cliff will impact taxes and federal spending but how will it affect the states and people who live in them? steve liesman has more bad news on the fiscal cliff. >> this thing is designed to cause pain throughout the country. our mapping of this using diver and lumius, their technology,
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they were able to heat map federal spending. it does cause pain throughout the country. this is a map, a county by county map of the united states that breaks down by color federal spending per capita. what you see is the red goes from $20,000 to $175,000, yes, all the way down to just $1,000. along the eastern seaboard that's a lot of fema. fema will take an 8% hit. in florida, a lot of social security spending. up here you have the risk management association -- sorry, agency, from department of agriculture. crop subsidy and drought relief comes through here. education, public assistance. the whole spectrum, pretty much, are subject to 8% cuts. let's take a look by state when we look at the total count here. this is from the pew research center. we find maryland, virginia, d.c., 20%. that's evenly split between the green, nondefense, and the blue, which is defense spending.
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hawaii, 16%. almost all of it is defense spending. places like kentucky and alabama. a lot of this is defense spending. a lot of these, by the way, are red states and they'll get hit. incentive for them to come to the table. one more way to look at this is federal jobs. this is by state. a red state, texas, a lot of federal jobs. a blue state, california, a lot of federal jobs. california is a state with high unemployment rate, over 10%. you can see there, virginia as well. texas with a lower rate. anyway, what this would be would be a federal spending hit on top of what's already going on in those counties and in those states, bill. what you hear from the pew center is that these states right now are not in very good shape right now to take additional federal cuts, given what's going on with their economics right now, bill. >> steve, do i understand when i look at california and texas in the red there, and i look at the
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numbers -- >> and virginia. >> and virginia. 10% to 13% of the work force is federal? >> of all federal jobs, yes. >> 10% of all federal jobs are in california but not all 10% of jobs in california -- >> no, all jobs in california are material jobs. >> 10% of jobs in california are federal. >> holy smokes! >> that's a big number. that could also be military. >> no wonder. >> stay there, steve. good stuff. let's talk about the cliff-hanger's impact on corporate spending. it is the lead story in the wall street journal today with half of the nation's 40 biggest spenders already cutting back as if another recession was on the way here or here. >> cato institute says this should be expected, companies need to protect themselves. michael mandela couldn't disagree more. he says it's nonsense. companies are tightening the purse strings when they have so much cash. michael, any incentive right now? why do you think this is
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poppycock, the fiscal cliff is not leading to companies investing? >> let's look at it addition let's take a closer look at spending patterns. what's happening is that tech investment is still rising. in fact, tech investment hit an all-time record in the third quarter. it's nontech spending, nontech investment that's collapsing. that has a lot more to do with fundamentals than it does to do with the fiscal cliff. what's happening is that this is becoming a data-driven world. companies continue to spend on technology at record level. at the same time, there's a slowdown globally leading companies to sort of pull back on their spending. so, when i look at this, maybe there's an effect to the fl fiscal cliff and maybe not. these are bigger forces going on. have you to look at technology spending. >> dan, what about that? i mean, you don't blame companies that may be hoarding cash to protect themselves in this uncertain environment but does that mean, likely, they're going to spend that cash or put it to work once we get a resolution of the fiscal cliff? >> it all depends on how it gets
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resolved. if obama gets his way, and we get big tax increases on small businesses, but also increased double taxation of dividends and capital gains, we'll have a less friendly economic environment for investment to car inside the united states. and that would mean an incentive for companies not to conduct business here. maybe to expand their branchs and their operations overseas. yes, there's the short-term uncertainty in the fiscal cliff that's hurting, but then i actually agree with michael. it's long-term fundamentals that matter. our government is just too much of a burden. >> steve, what's at stake here? >> i want to talk about two scientists from two different fields. one is pav lolov. a dog would salivate when you put food in hem. ed prescott took that idea and said, you know what, when companies spend, they spend after and during recessions when they can count on getting r&d
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tax credits from the government. they become conditioned to wait for lousy times for that spending to happen. that's a problem we have with our tax code, which seems to change all the time. >> you've got the data dish you've got the data-driven growth happening right now. companies are spending on technology. >> because they have to. >> on communications equipment -- >> well, they have to. companies like at&t are pouring billions of dollars into sort of building out their base. it's really important to think about -- i agree with dan. have you to look at the character of the spending and the cuts. i'd like to see the government focus on investment. investment in human investment, capital investment -- >> you would like the government to spend less on that? >> i'm less concerned with the tax code at this point. what you -- >> can we get dan mitchell in here? >> go ahead, dan. >> in some sense i agree with michael. human and fiscal capital spending is a lot less destructive for the economy than what public finance economists
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call transfer and consumption spendi spending. overwhelming what government does is redistribution spending that is very bad for economic growth. the fundamental lesson is trend lines matter and the trend line is that we are becoming more like france, italy and spain, with each passing year. and obama, instead of turning the car in the right direction, is stepping on the gas. >> dan, i think you're overstating the case. >> very quickly, steve. >> government spending went from 21% to 24%. in those countries it's 55%. i understand it's up -- >> you have to count state and local spending xl. during the president obama years we went from 32% of gdp to 40% of gdp. germany's 42%. we're not far behind them. then you have france and italy and spain -- >> steve, dan, michael, thank you so much, guys. we really appreciate it. >> we have a lot more to say on this topic. >> it's one that could go on for a while here.
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>> we're heading to -- by the way f we become france and italy, does that mean the bread and cheese and water -- >> 20 minutes to go here, hanging onto those gains. we rallied in the open. the dow's up 177. >> i could see you at a cafe with a cigarette hanging out. >> you haven't seen anything yet. find out why our next guest says even bigger gains are on the horizon if things go the way he thinks they're going. >> walmart moving up its dividend payout from january up to december to avoid the looming fiscal cliff tax increase. should companies and investors be making these huge decisions based on uncertainties? we'll look at that coming up.
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or trouble breathing. tell your doctor your medical history and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion. welcome back to the dow right now, on track for its biggest point gain since september 13th, which was the day before the fed announced quantitative easing number three. some are calling this the rise above rally because it's all about the fiscal cliff and a growing belief maybe washington isn't crazy enough to drive off of it. >> maybe. >> maybe. >> tom lee at jpmorgan says some clients are not so convinced and are even writing off the rest of
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2012, but he's not making that call himself. he joins us now here on set, along with tobias of citi, who is making some changes to his portfolio strategy. also with us is bob pisani. are you doing something different tobias because we got this kum-bi-ya moment over the weekend? >> no, no. >> why are you changing, then? >> we do this every two months. we review everything from sentiment indicators, specifically industry groups, not because of -- >> none of this has an impact? >> none of it. >> are you worried about defense spending cuts -- >> are you buying more or selling more? >> the first five financials are booking in some profits and we're actually taking down a couple of defensive areas. it's not because we say get long, get aggressive. >> why aren't you writing off the rest of the years like so many clients you met with this last week? >> i think part of it is, you know, we still have what i consider to be the cornerstones of a bull market. i think the u.s. housing market is still strengthening.
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we have good data today on that. i think the u.s. expansion is in pretty good shape. there will be noise from hurricane sandy but we got lower gasoline. i think investors are going to say, as we get visibility on the cliff, you know what, maybe i shouldn't write off the rest of the year. if the market is up, you'll see investors chase this market higher. >> what if they're wrong and tax goes up and government cuts spending dramatically? >> we have sort of a taste of that. i think the panic over the last week was higher taxes. people taking in capital gains. some glumness about washington. something to take in mind if we have some cuts coming, is that in 2013, washington may not be in headlines the way it has been in the last five years. >> that would be lovely. >> that's the best news i've heard all day. >> next thing you tell me they'll stop making twinkies or something. bob pisani, what do you make of today's rally? >> i think we need to get congress to leave town more
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often because that's what's going on. >> there's nobody around to bad mouth potential talks on the fiscal cliff. on friday, everybody made nicy-nice. the president said a deal, talk shows. what we have to do now, this will last a few days, we have to put meat on the bones and see what the details are and what actually the final negotiations are going to look like. i'm not sure, mr. lee, there won't be a nice rally. the s&p is down 100 points. that's pretty serious. i would agree with tobias's comments, downgrading financials, everybody is doing that because of the crummy interest rate environment and low growth environment. that makes sense to me. >> aren't financials a leadership group? if they can't lead doesn't that bode poor for the market? >> we still like financials. i think they're underowned. >> you disagree with the premise? >> we have nim headwind -- >> nim?
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>> i thought the meant the national institute of mental health. >> maybe, maybe. you can't tell the difference sometimes. >> you've downgraded the financials. >> still overweight insurance. neutral on the banks for a while, the regional banks for a while. it was more specific to the capital market sense of the games, the investment banks, the brokerage firms, asset managers, that kind of area. >> if we get a deal, how much does the market rally? >> i know a lot of clients say they'll chase this market up 2%. they want to be flat. if the market gets a big bid, they'll chase it. i think you'll get a beta chase. i think it's quite possible to be 1430 by year end. >> do you chase it? >> i think if we get a deal mid to late december, that's when that rally occurs, when you have a liquid market and you can get a little bit more out of it because of the liquidity. to be fair, nobody is in washington doing anything because the president is off in asia. next week will get more volatile when everybody's back and you're
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going to get more of the rancor coming out. we talked to people in congress -- >> thank you. >> good to see you both. >> thank you, bob. tobias, we'll see you on "the countdown" coming up. >> 13 minutes before the closing bell. dow jones higher by 174 points. >> not just to equities, oil prices are also popping. we'll head live to the oil pits next. from one battle to another, the twinkie isn't dead just yet. we'll get the latest from the bankruptcy hearing with a member of the union who walked off the job. [ male announcer ] you are a business pro. monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g.
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once again oil prices spiking on escalating violence between israel and gaza. jackie at the nymex. >> definitely a risk-on day in the energy complex today. as you mentioned, tensions in the middle east a big piece of that. we saw wti and brent both spiking about 3% each. in fact, wti hitting a one-month high, adding $2.36 at the close but settling under $90 a barrel. one trader pointed out something interesting. on a day we saw wti spike $2.50
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he was looking for volatility in the marketplace which he said came in as he was looking at options market, indicating that this could just be a short-term blip for oil and the market may not be expecting this to be a longer term issue. of course, violence and tension in the middle east is a big issue, especially post-arab spring. have you a tinderbox there so people will be watching these events closely to see if they ignite something more. a lot of green arrows in the energy space. nat gas closed slightly lower. >> ignite something larger, that's the bigger question we face. that's what we wonder about. the other thing that's so different this time around is the role of egypt is completely different because the arab spring has happened. we used to kind of know where -- we knew exactly where hose any mubarak stood. >> are they a mediator? an instigator? >> i don't think they know. >> they're trying to figure out their role. i'm not trying to minimize
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what's going on but i think traders are using this as an excuse to bid oil prices higher. we're not at a point we're seeing evidence that you can see a cut-off in oil supplies, especially for new york oil. >> that's ultimately the question. will there be a disruption? what series of events would occur to stop the flow of oil? >> suez canal, wherever it is, we're not there yet but trading it up just in case -- >> it ignites something wider. >> our own oil market in new york trades more on our economic fundamentals and tends to follow brent, not the other way around these days. brent's been going higher. >> london brent is far more influenced than by what's going on in texas. >> you bet it is. as the oil market goes, lately, the stock market has gone in the same direction. today we're very much seeing that. you see both contracts up at least 2.5% and the u.s. stock market is following right now. a complete recap as we head toward the close here.
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coming back with the closing countdown. we're setting highs again. up almost 200 points on the dow right now. >> wow, look at that. you're right. after the bell, stocks rallying on hopes for a fiscal cliff deal. we're calling it a rise above rally. just imagine how high stocks quoo go if they really did actually reach a deal? >> we'll get to that. the video game industry is struggling. why is nintendo making a big bet on a whole new wii console. the president of nintendo america shows off the wii-u and shows why he's banking on it to fly off the shelves this holiday season. i always wait until the last minute.
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can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery. and his new boss told him two things -- cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him,
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and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. 2:30 and left and going out on the highs. just a big pop. we've gone side ways since that time. until the close right here that gain of 192 points. we're moving higher for all the major averages. apple has been a stellar performer today. a gain of 7.3% today.
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we had much of the fact that apple was in bear market territory, meaning it was 20% below its most recent highs. we are now out of bear market territory at these levels right he here. on the dow jones industrial average, going back this year. each time we've pierced below the 200-day moving average. the trading pattern has been the same every single time. this chart doesn't do it justice because we couldn't show you minute trading. goes down below the 200-day moving average, sideways, rallies back again. here we are again. the big rally last week that took us below it and now we're rallying higher again. am i wrong to point that out? is it possible, then, matt that we're going to go higher here through the end of the year? >> you're skeptical? >> i think it's an oversold rally. let's call it what it is. we needed a bounce. we got a little optimism because we got nothing out of the government.
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that's a good thing. any time the government says nothing, we get a rally. that's all i'm going to buy. i would rather sell stock today than be buying it. >> tobias? >> i'm suspect of today's move as well. the lack of bad news out of washington. there's nothing going on. it's next week, after thanksgiving. people get filled with turkey and ready to talk real turkey. >> aren't we at a crisis point? where's the sense of urgency in washington? shouldn't they be working overtime right now, he asks polyanna-ish? >> you would think so. they wait and kick the can down the road -- >> you're not impressed by a 200-point rally on the dow today? >> i'm impressed but the question is, is it sustainable? >> you don't think it is? >> not with the economics,